Come on!

Larry Summers Says the Market Isn’t Nearly Scared Enough of Trump

Left, by Drew Angerer; Right, by Simon Dawson/Bloomberg, both from Getty Images.

Save but for a brief few moments when markets crashed on Election Night, investors have been seriously damn happy about Donald Trump moving into the White House this month. The S&P is nearing a record high, while the Dow Jones Industrial Average is so close to 20,000 that people who spend their time salivating over such things, and buying the associated headgear, can practically taste it. But not everyone is so bullish on our orange-tinted new president. Former Treasury secretary Larry Summers, for one, would like to remind everyone helping fuel this rally Trump remains an unpredictable madman. Per Bloomberg:

The Harvard professor, a Democrat who was Treasury chief under Bill Clinton, cited the possibility of protectionist measures by the U.S. as well as changes to foreign policy and domestic social policy as issues that are creating “extraordinary uncertainty.”

“This is probably the largest transition ideologically and in terms of substantive policy that we’ve seen in the U.S. in the last three quarters of a century,” Summers told Tom Keene in a Bloomberg Television interview Tuesday. “Those kinds of transitions have to be—given the central role of the U.S. in the global system—matters of enormous uncertainty. I don’t think that’s fully recognized by markets.”

And for those of you thinking Trump will introduce a tax policy that will encourage companies to bring loads of cash back into the U.S., thereby spurring investment, think again. “The vast majority of the companies who have large overseas cash also have substantial amounts of domestic cash,” Summers said. “The reality is that cash that is brought home will be used to pay dividends, to buy back shares, to engage in mergers and acquisitions, to rearrange the financial chessboard, not to invest in large amounts of new capital. It is a chimera to suppose that there will be large increases in capital investment as a consequence of that repatriation.” Wake up, people.